Inside General Mills’ Earnings Call: Why FY26 Is About Reset, Not Results
- Hardik Shah
- Dec 18, 2025
- 3 min read
At first glance, General Mills’ ($GIS) fiscal second quarter looked like another difficult chapter for a legacy food company navigating a pressured consumer. Sales declined. Margins compressed. Earnings fell sharply.
But the earnings call told a more deliberate story.
This was not a quarter defined by operational slippage. It was a quarter shaped by intentional sacrifice. General Mills is using fiscal 2026 as a reset year — prioritizing volume recovery and brand competitiveness over near-term earnings optics.
“Our primary focus this year is investing to strengthen the remarkability of our brands because we know that delivering greater remarkability to consumers is the key to restoring organic sales growth for our business,” said Jeff Harmening, Chairman and Chief Executive Officer, during the prepared remarks .
The Numbers (Context, Not the Conclusion)
Net sales: $4.9 billion, down 7% year over year
Organic net sales: down 1%
Adjusted operating profit: down 20% in constant currency
Adjusted EPS: $1.10, down 21% in constant currency
Organic volume: flat overall; positive in North America Retail for the first time in more than four years
Share performance: held or gained pound share in 8 of the top 10 U.S. categories
Management emphasized that results came in ahead of internal expectations, with some profit timing benefits expected to reverse in the third quarter.
The Reset Is Showing Early Signs
The most important development was not earnings — it was volume.
General Mills delivered sequential improvement in organic volume and organic net sales versus the first quarter, with North America Retail returning to organic volume growth. That inflection follows a year of work addressing price gaps, pack architecture, and shelf execution — changes designed to improve competitiveness rather than margins.
“Importantly, we posted organic volume growth in North America Retail for the first time in more than four years,” Harmening said. “And we returned our North America Pet segment to organic sales growth in the quarter” .
Pricing actions, often a source of risk in a value-stressed environment, have so far behaved as management hoped.
“Encouragingly, we’ve seen elasticities in line or ahead of our expectations across roughly 90% of those investments,” Harmening added .
“Remarkability” as an Operating Framework
General Mills’ strategy hinges on what it calls its Remarkable Experience Framework, spanning product, packaging, brand communication, omnichannel execution, and value.
During the quarter, the company:
Increased media investment at a double-digit rate
Accelerated innovation focused on affordability, protein, and convenience
Expanded pack formats to sharpen price points
Used digital and AI tools to improve media return on investment
Management expects these actions to drive a 25% increase in sales from new products in fiscal 2026, a meaningful acceleration versus recent years .
Portfolio Support While Retail Rebuilds
Other segments are quietly supporting the reset.
North America Pet returned to organic growth, with near-term margin pressure driven by investment in Love Made Fresh and other growth initiatives.
Foodservice held or grew share in nearly 90% of priority businesses despite flat organic sales.
International delivered 4% organic net sales growth and 30% operating profit growth in constant currency, led by emerging markets .
Capital Allocation: Discipline, Not Retrenchment
Despite near-term earnings pressure, General Mills has not pulled back on capital returns or balance sheet discipline.
Through the first half of fiscal 2026, the company:
Generated $1.2 billion in operating cash flow
Returned $659 million in dividends
Repurchased $500 million of shares
Reaffirmed its commitment to free cash flow conversion of at least 95% of adjusted after-tax earnings
“We remain focused on driving efficiencies to reinvest in growth,” said Kofi Bruce, Chief Financial Officer, noting that Holistic Margin Management savings are helping fund brand investment rather than offset it .
What Matters From Here
General Mills has been explicit: fiscal 2026 is not about maximizing margins. It is about restoring demand.
The scorecard investors should watch over the next several quarters:
Sustained organic volume growth in North America Retail
Dollar share catching up to pound share
Margin stabilization in Pet as launch investments mature
Evidence that elevated media and innovation spend is driving repeat purchase and penetration
If those signals continue to improve, fiscal 2026 may be remembered less for declining earnings — and more as the year General Mills reset its growth engine.
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